Vietnam’s statistics office yesterday forecast GDP would grow 2.5 percent this year, far below the official target of up to 6.5 percent, as tough COVID-19 policies have affected almost every corner of its economy.
The outlook, provided by the head of GDP data at the Vietnamese General Statistics Office, paints an increasingly bleak picture for a nation that had earlier powered through the COVID-19 pandemic.
After successfully curbing infections during the early stages, the Southeast Asian nation now sees its export-dependent economy crippled by restrictions that are disrupting supply chains, shuttering factories and crimping output.
Photo: EPA-EFE
The full-year estimate comes after the statistics office earlier in the day reported that GDP in the third quarter slumped 6.17 percent from a year earlier, the worst performance since it started tracking the figure.
That compares with a median estimate in a Bloomberg survey for growth of 2.25 percent and a revised 6.57 percent expansion in the second quarter.
Authorities have imposed tough measures for months to contain the virus, ranging from ordering factories to shut down if they cannot provide sleeping arrangements for workers to barring residents in the nation’s commercial hub, Ho Chi Minh City, from shopping for food.
About 94 percent of the country’s companies are facing “difficulties,” Pham Dinh Thuy, head of industrial statistics at the General Statistics Office, told a briefing in Hanoi, citing supply chain disruptions, labor shortages and higher costs for wages and worker accommodation.
“Companies are exhausted,” Thuy said. “The government is working on multiple measures to help quickly get companies and businesses back to normal operations.”
Growth in the final quarter of the year could be 5.3 percent, after expanding 1.42 percent in the first nine months of the year, said Le Trung Hieu, head of GDP statistics at the General Statistics Office.
To meet the government’s official full-year target range of 6 to 6.5 percent, the country would need “a very high growth rate” in the fourth quarter and “that’s impossible now,” Hieu said.
Growth at 2.5 percent for next year is the “most realistic” outlook, he said.
“If the government keeps up its pace of vaccinations, it is reasonable to believe that the economy will start recovering,” SSI Securities Corp institutional sales head Nguyen Anh Duc said.
“If the virus is well-controlled, the economy will recover rapidly next year,” he added.
About 8.8 percent of the nation’s population has been fully vaccinated, the Vietnamese Ministry of Health said.
In Ho Chi Minh City, more than 29 percent of residents were fully vaccinated as of Monday, the city’s press center said.
Virus measures have shuttered factories across the southern economic core around Ho Chi Minh City, particularly clothing and shoe manufacturers with clients that include Urban Outfitters Inc, Nike Inc and Abercrombie & Fitch Co.
Meanwhile, some higher-end technology manufacturers have been able to keep running with smaller, isolated workforces.
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